Philip Cary | Will health IT help cure the value gap?

March 26, 2009 | Philip Cary

The U.S. health care system costs more and delivers less than rival ones in rich trading partner countries such as Britain, Japan and Germany -- or even developing nations such as China, India and Brazil. That's the remarkable conclusion of The Health Care Value Comparability Study recently completed by the Business Roundtable, a group representing major U.S. companies that generate more than $5 trillion in annual sales and provide health coverage to 35 million workers.

The blue chip lobbying outfit billed the study as a comprehensive, cross-border look at the costs and quality of U.S. health care. And for the moment at least, the U.S. is experiencing a health care "value gap" with other countries. The higher health care tab that U.S. companies face on a relative basis is undermining U.S. corporate competitiveness, the BR contends. On top of that, "the higher spending that should lead to a healthier workforce, strengthening our ability to produce and innovate, currently does not," according to the study, released this month and prepared by the consulting firm Mercer.

To help reverse this state of affairs, the BR has joined the ranks of those calling for more effective use of information technology to improve efficiency and empower consumers to make more informed choices about their health. That's not entirely surprising, given that many of its members stand to gain from the $19 billion set aside in the Obama administration's massive economic stimulus push to create a national system of computerized health records.

But is a big dollop of government-directed spending on information technology really the answer to what ails the U.S. health care system? And do American health care providers really do such a lousy job as portrayed in BR study? Like all cross-border studies, it pays to take a closer look at metrics used to rate the performance of U.S. health care.

In this study, Mercer concluded that the major Group of Five countries (Japan, Germany, France, Britain and Canada) spend about 63 cents for every dollar Americans spend for health care. A trio of developing countries (Brazil, China and India) spends just 15 cents for every buck Americans do. That wasn't completely surprising, though there are vast differences in the health care systems of these countries that make such comparisons tricky to interpret. The health costs are adjusted for the relative size of each country's economy and the purchasing power of local currencies vs. the dollar.

More jarring, though, is the conclusion that by 17 national measures of health, ranging from adult mortality to obesity and blood pressure, the U.S. health system underperforms not only rich global trading partners but India, China and Brazil. This finding is skewed by the focus on workforce health.

That's important for a group like the BR, but doesn't give a full societal view of the broader population's health and well-being. India and China, for instance, have higher infant mortality rates and illnesses linked to pollution than the U.S. Obesity is a huge problem in the U.S. and hurts America's relative health ranking. Yet it is that really an indictment of the U.S. health care system"or more an issue of American eating habits.

Also, how does one account for America's long track record of innovation when it comes to scientific advances and medical technology or the quality of the country's medical schools?

Even Mercer is quick to note in its study that when it comes to these metrics, "the American health care system is among the best in the world." None of this is to say that the BR study isn't a worthy effort. It's just that the major conclusions by the group need to be handled with care.

That said there is no denying that the U.S. is a straggler when it comes to using health information technology compared to health systems in the industrialized world. (The BR study only examined IT use in the U.S.) Dr. David Blumenthal, the incoming national coordinator for health IT, estimates only about 17 percent of U.S. physicians have basic electronic health record (EHR) systems in place. "In most European countries, as well as in New Zealand and Australia, 80 percent to 100 percent or primary care physicians have EHRs," he noted in a article published by the Commonwealth Fund in January.

However, there is scant conclusive evidence that digitized health records and other efforts to wire health care systems have paid off overseas or will down the road in the U.S., Blumenthal noted.

"The evidence that wiring the U.S health system would actually save money and improve quality of care is fragmentary, which heightens fears that a big HIT push will be disappointing," Blumenthal wrote. " At the same time, the limited information available suggests that EHRs and other HIT applications do, indeed, improve quality and efficiency."

That's why doctors and many hospitals have been cautious about major investments for IT systems. Getting health care digital systems to talk to one another is a big challenge, as is maintaining health information privacy. The federal government can help push the process forward by helping set technical standards and creating the right financial incentives. But even advocates like Blumenthal concede a big investment by Washington may in the end be a disappointment if not spent wisely.

Add it all up and it's clear that the U.S. health care system is still world class, but needs to get a grip on costs. Moreover, health IT likely will play some role down the road. But beware of both broad indictments and easy-sounding solutions. The U.S. health care system is vast and unruly. Improvements will most likely come in fits and starts -- and take time.